Trump-Powell Firing Drama Rattles Markets; Senate Passes DOGE Cuts

Bloomberg Audio Studios, Podcasts, Radio News.
Good morning.
I'm Nathan Hager and I'm Karen Moscow. Here are the
stories we're following today.
Karen, we begin with the story that has had markets
in a headspin, the White House pressure campaign on Federal
Reserve Chairman Jerome Powell. President Trump reportedly floated the idea
of firing the FED chair in a room with Congressional
Republicans this week. The President says he does not intend
to fire Powell, but an Oval Office comments heard live
on Bloomberg Radio, he did have a caveat.
I don't love anything, but I think it's highly unlikely
unless he has to leave fraud. I mean it's possible,
as fraud involved with the two point five two point
seven billion dollar renovation.
President Trump has had the renovation of the Fed's two
main buildings is over budget and too lavish.
Well.
Nathan Bloomberg's and Marie hor Dern was in the Oval
Office for the president's remark. She asked hibout reports that
he waived a draft letter firing Powell before Congression of Republicans,
your large.
Republican lawmakers last night. No I talked about the concept
of fire and I said, what do you think?
Almost every one of them said I should.
But I'm more conservative than they are.
And it's unclear whether the President has the power to
remove the FED share, but the pressure might not let up.
Several of the President's aids, including White House Budget Director
Russell Vode and Federal Housing Finance Chief Bill Poulte, are
pushing to inspect the fed's renovation.
Of course, Karen, you can expect that plenty of reaction
will continue to pour into the possibility of firing the
FED chair. Bloomberg's David Weston caught up with Bank of
America CEO Brian moynihan.
The FED as an independent agency, and they're meant to
be outside the purview of the executive and Congress. They
are called a task and are monitored and they're reviewed
at all the things. But the really reality was set
up to be inte petit, so that our central bank
in America was indepetit.
Bank of America CEO Bran and Moynihan's thoughts recorded by
Massachusetts Senator and frequent Powell critic Elizabeth Warren. She tells
Bloomberg the FED needs to remain independent.
People in the Cabinet. People are serving in the administration,
serve at the pleasure of the president.
That is the structure.
That is fine.
Donald Trump wants to get mad at one of them
and fire them, have at it, baby. But it's different
for the FED share and that is why that office
needs to be held by someone who is independent.
For the full conversations with Elizabeth Warren and Brian moynihan,
head over to the Bloomberg podcast channel on YouTube.
Well Nathan. A few hours ago, the Senate passed about
nine billion dollars in federal spending cuts requested by President Trump,
including deep reductions to public broadcasting in four and aid
and we get the latest at Bloomberg's Monica Ricks.
The fifty one to forty eight vote wraps up a
thirteen hour vote rama on the Senate floor, passing President
Trump's request to cut about eight billion in global aid programs,
including You Said, and another billion for the Corporation for
Public Broadcasting, which supports public radio and television stations like
NPR and PBS. Republicans Lisa Murkowski of Alaska and Susan
Collins of Maine joined all Democrats in opposing the package.
It now heads to the House for approval ahead of
a deadline tomorrow before Trump consigned into law. Monica Rix
Bloomberg Radio A.
Right, Moonica, thank you now to the latest on the
trade front. President Trump says he'll send letters to more
than one hundred and fifty countries notifying them their teriff
rates could be ten or fifteen percent. In recent days,
the President's unleashed a barrage of tariff demands, informing other
economies of new duties that'll kick in August first if
they cannot negotiate better terms with the.
US hey then.
A new survey suggests a record share of American firms
froze investments in China's trade ties worsened earlier this year.
Fewer than half of the companies surveyed by the US
China Business Council between March and May so they planned
to invest in China in twenty twenty five. That's to
draw from a eighty percent last year, in a record
lo since the group began asking a similar question in
two thousand and six.
Karen, A major gathering of foreign policy professionals is underway
in Colorado, But as Bloomberg's David Gurra reports, the Trump
administration decided at the last minute not to allow senior
Pentagon officials to participate.
The Defense Department made the announcement one day before the
Aspen Security Forum was scheduled to start, saying its values
were not aligned with the administrations. Organizers had to cancel
on stage interviews with combatant commanders at a conference that
has traditionally hosted officials from Democratic and Republican administrations. Former
Ambassador Nicholas Burns, who helps run the forum, address the
Pentagon's decision in his opening remarks.
We regret it very much. But here's our response, and
we put out a statement you can all read it.
Our door is open, obviously to the Trump administration. We
want our government to succeed.
Speakers will include officials from President Trump's first term, alongside
advisors to president's Obama and Biden. In Aspen, Colorado, I'm
David Gura Bloomberg Radio.
All right, David, thank you well. President Trump also continues
to face questions about his administration's handling of the Jeffrey
Epstein case, but he says the focus on the late
sex offender is a distraction.
It's all been a big hoax. It's perpetrated by the
Democrats and some stupid Republicans and foolish Republicans fall into
the net.
And the President says Attorney General Pam BONDI should release
credible evidence in the case, but he says he knows
it's a hoax. Other Republicans are still pushing for a transparency,
including Florida's Anna Paulina Luna.
I've always advocated for transparency, but I do think it's
also probable, which is why we'd like to see the information.
Where I think the American people deserve to see the
information is that there was some tampering of evidence under
previous Deputy Director's authorities.
And Republicans have not given evidence of tampering or fraud
in the case. Meantime, Bloomberg News has learned former FBI
Director James Comey's daughter has been removed from her job
as a federal prosecutor in New York. Maureen Comy worked
on the Epstein case as well as the sex trafficking
trial of Sean Diddy Combs. The circumstances around her departure
are not immediately clear.
Turning to markets now, Karen the s and P five
hundred enters the day, near all time highs after whip
sign yesterday on the FED News. Earnings continue today. A
dozen companies in the SMP five hundred will be reporting,
including Netflix. We get a preview from Bloomberg's Tom Busby.
Thanks to the breath of its content, it's pricing power,
it's advertising supported tier and password sharing crackdown. Netflix now
has over three hundred million global subscribers, and new seasons
of hits like Squid Games, Wednesday, Stranger Things and more
will surely keep those subscribers paying up. But Netflix no
longer reports subscriber numbers, so investors will have to look
at advertising revenue from its push into live sports programming
like WWE Raw and UFC events. Bloomberg consensus calls for
revenue of eleven point zero six billion dollars earnix per
share of seven dollars and nine cents.
Tom Busby Bloomberg Radio.
All right, thank you all shares of Archer Daniels Midland.
They're down more than five percent this morning. The drop
for the corn syrup maker. It comes after President Trump
said Coca Cola has agreed to use real cane sugar
in coke in the US. Time. Now for a look
at some of the other stories making news in New
York and around the world, and for that we're joined
by Bloomberg's Michael bar Michael, good morning.
Good morning Karen. We're hoping the heavy rains from earlier
this week won't repeat itself today. In the Northeast. Bloomberg
Media Religis Rob Carolyn has the latest.
While we do have a frontal system headed our way,
it doesn't look like we're going to have the right
combination to produce flash flooding across a wide section of
the New York City area or in southern New England
like we had last week. There was some isolated flooding
outside the District of Columbia last night, but just don't
have the right ingredients. That's not to say that some
of the thunderstorms will pass through the region today won't
be able to produce heavy rain and localized flooding. It's
just I don't expect as many wide areas as we
saw outside of Boston last week, or around the Tri
State area as we had earlier this week.
I'm Rob Carolyn, Bloomberg Radio.
Thank you, Rob. Israel is launching strikes on portions of
Syria's capital, Damascus. The strikes on government facilities come after
the IDF said it is protecting the Dreuze community, a
minority population in Syria that also resides in parts of Israel.
At the White House, Secretary of State Marco Rubio says
the US is intervening.
We think we're on our way towards a real de
escalation and then hopefully get back on track and helping
Syria build a country and arriving at a situation and
in the Middle East as far more stables.
Drew's leaders say the Syrian government violated the terms of
a ceasefire, but Syrian officials refute that. A former commissioner
for the nypd as sued current Mayor Eric Adams and
three of his associates, accusing the group of running the
police force like a criminal enterprise. Thomas Donlin briefly led
the NYPD as interim commit Adams calls the accusations baseless
and absurd. Global News twenty four hours a day and
whenever you want it with the Bloomberg News Now, Michael Barn,
this is Bloomberg Karen.
All right, Michael Barr, thank you time now for the
Bloomberg Sports Update, brought to you by Flushing Bank and
here's John Stashauer.
John, good morning, Good morning Karin. One hundred and fifty
third Open Championship underway this morning and the early leaderboard
fifty five year old Phil Mickelson is time for the
ladies two hunder through nine defending chams Anders Schoffley just
teed off. He's playing with John Rahm and the surprise
US Open winner JJ Spahn. Next group has world number
one Scottie Scheffler with Colin Morikawa and Ireland Shane Lowry,
who won the Open the last time it was held
at Royal Port Rush in twenty nineteen. The only other
time it was held there was nineteen fifty one. It's
a homecoming for Northern Ireland native Rory McElroy.
Be here to see a lot of familiar faces, you know,
even some of the every you know hole on the
course has a different team of marshalls from different golf clubs,
and then just to see people that you know I've
met throughout the years right.
There this morning was really nice.
But yeah, it's it's really nice to be back and
obviously very very excited for the week.
Rory played this course when he was sixteen years old
and he shot a course record sixty one. They have
made it more difficult since then. His tea time today
just after ten o'clock WNBA. It was to be a
Caitlin Clark appearance in Brooklyn, but she missed her eleventh
game of the season of recurrence of her growing injury.
The Liberty beat the Fever easily. Breonna Stewart scored twenty
four NBA. Bradley Beal a star in Washington, not so
much of his two seasons in Phoenix, and the Suns
bought out his contract. Beal is headed to now play
for the LA Clippers. Headed to Washington to play for
the Commanders. Veteran edge rusher Von Miller, now thirty six,
not the player he was while in Denver. He got
released by Buffalo Johns Stashanwer Bloomberg Sports Karen.
Nathan Coast to coast on Bloomberg Radio nationwide on Serious XM,
and around the world on Bloomberg dot Com and the
Bloomberg Business app. This is Bloomberg Daybreak.
Good morning, I'm Nathan Hager, turning attention now to our
conversation with Bank of America Chairman and CEO Brian moynihan.
Following the big banks beat on earnings, moynihan joined Bloomberg's
David Weston to discuss the results, small business health, and
independence of the Federal Reserve. Brian moynihan also offered his
long term economic outlook.
Let's listen in conservers. Pretty good when you go to
small businesses.
That's more of the question small medium sized businesses because
the interest rate environment hits them harder because they borrow
on lines of credit short term for a lot of
their activities, and that rate went up substantially at anything
about the If I'm a one hundred million dollar company,
a fifty million dollar company here in North Carolina, and
I'm engaging in the world finance, I'm importing goods and
manufacturing them, further manufacturing, I'm selling them. You know, it
got pretty interesting here trying to figure out all the
trade and tariffs. So I think certainly on a tap
X rate helps them, meaning the big beautiful bill passing
and the tax rate. That's a very good thing. The
alternative would not been good if their tax rates would change.
A satisfactory resolution to the trade so that they can.
Learn the rules of the road.
Over the next thirty sixty ninety days and get their
plans for next year put together, and I think ultimately
they're gon We've got this satisfactory resolution on immigration and
population growth, because the end of the day, when I'm
hearing more from the construction companies, farming companies, and travel
entertainment type companies, is I'm starting to worry about I'm
starting to struggle with labor availability at any price, and
that's that we got to make sure they have the
workers because they will supply great service economy and continue
to grow.
One of the things you reported today was net interest income,
which is really important to all banks, but particularly Bank
of America, and just steady growth that you're showing in
that how sensitive are you to the rates set by
the Fed? If that comes down substantially, does that affect
the Bank of America much?
So embedded in our estimates. So we've told our the
world that this quarter we had fourteen point eight billion
dollars in that interesting income and that is the fourth
straight quarter of growth and came off the floor last year.
This quarter, when I was talking to you, was the
lowest it's been. This quarter was a record in the
company's history. And we're saying we're going to grow from
that record to fifteen five to fifteen seven and two
more quarters the third quarter and the fourth quarter. That
embeds in it the rate cuts in the market that
are expected by market.
We don't we only show it that way.
If you have rate cuts over above that, that would
hurt that number, but it would still grow frankly and
so and that the good thing about that is because
the great loan of Positi growth seven percent loan growth
four percent to Posit growth over the last year. That's
in the system that's capitalized it.
I mean, that's here. It doesn't go away.
And as that continues to stay and we add to it,
what you're starting to see is that sets us up
great for next year for further ANII growth and further
EPs growth. So this quarter was the trickiest quarter to
get through because of you. Every year we finally got
some ani growth, but you every year markets business doing
strong sixpence gross is a little more robust. That'll get
lined and then you'll see and I dropped the bottom
line and it will set up for twenty twenty six.
We dive the more growth.
When you talk about twenty twenty six, one of the
things we're going to have is all likely a new
FED chair. There's been a lot of talk even today
in Washington by the FED chair, and you said, you
believe in an independent FED. But if in fact President
Trump gets his wish, as is his right under law,
to appoint a new chair who will be more in
line with his views, he said he thinks the interest
rate really squ at one percent or even below that
is that good for Bank of America? Is that good
for the economy.
Well, let me make two things. One is you're absolutely right.
And May of next year, the term the curve FED
chair ends after being reappointed, and it's the right of
the elected president to appoint the next successor and go
through Congress. And I think in that dialogue around that
there'll be a lot of dialogue about, Okay, how do
you set interestrates? What do you think about interest rates?
Because the FED is an independent agency and they're meant
to be outside the purview of the executive.
And the Congress.
They are called to task and are monitored and they're
reviewed at all the things. But the really reality was
set up to be independit so that our central bank
in America was independent. So I think no matter who
gets in, they're going to look at it and have
to look at the facts and make a decision, because
if you drop rates too far, inflation may kick up
and then you're gonna have to raise them back quickly.
On the other hand, if you think the prior Fed
has been slow to the lower rates, you might lower
and faster. Our team believes that the Fed will lower
rates in a second half the next year by one
hundred basis points. No change until then because inflation is
still going through the system. That brings the FED funds
rate down closer to three, which they think is probably
more of a long term rate and frankly, is more
similar to what we had for most of American history.
What's been unusual is the period after the global financial crisis,
a very low interest rate structure. That is really not
a good place to be, honestly. We rather have a
higher interest rate structure, a little more inflation, a little
more robust economic growth. So I think everybody asks me
a little careful about keeping that engine going, because if
this engine fails, a whole world fails.
It's Bloomberg Daybreak, your morning podcast on the stories making
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And I'm Nathan Hager. Join us again tomorrow morning for
all the news you need to start your day right
here on Bloomberg Daybreak